Detroit automakers got public reassurance Monday from President Bush that short-term government help for the industry is in the works and could come soon.
"An abrupt bankruptcy for autos could be devastating for the economy," Bush told reporters aboard Air Force One during an unannounced trip to Iraq and Afghanistan. "We're now in the process of working with the stakeholders on a way forward. We're not quite ready to announce that yet."
Bush wouldn't give a precise timetable but said, "This will not be a long process because of the economic fragility of the autos."
Detroit automakers, their suppliers and the United Auto Workers union hope the Bush administration acts quickly this week on a rescue plan that could avert bankruptcy filings by General Motors gm and Chrysler.
"Time is of the essence," UAW President Ron Gettelfinger says. "There is a sense of urgency."
But Sen. Bob Corker, R-Tenn., said on CBS' Face The Nation that he spoke with the White House early Sunday: "I don't think they yet know what they're going to do."
The sticking points are sure to center on the "meaningful concessions" that White House spokeswoman Dana Perino said will be imposed on the companies, creditors and workers to protect the taxpayers. A $14 billion bailout loan package fell apart last week when Senate Republicans and the UAW disagreed in a dispute over wage concessions.
GM and Chrysler say they will be forced into bankruptcy filings within weeks if help doesn't arrive soon. After Senate Republicans turned aside the rescue package, the Bush administration maintained calm in the markets and the industry by saying Friday it would act, perhaps with funds remaining from the financial industry bailout.
Bush is unlikely to offer much more than a Band-Aid, says Douglas Bernstein, a bankruptcy attorney for the firm Plunkett Cooney in Bloomfield Hills, Mich. "My suspicion is all they are going to do is get them through to the next administration."
GM is encouraged. "The administration's strong signal to consider other aid options recognizes the gravity of the current state of the auto industry and its role within the economy," spokesman Greg Martin said in a statement Sunday.
The financial situation has become so dire that GM announced last week it will slow production at 14 U.S. plants in the first quarter of 2009 and make 250,000 fewer vehicles than previously planned.
Gettelfinger, often a harsh Bush critic, said he hopes to avoid a rerun of the Senate showdown in which "organized labor was singled out."
It's not only automakers in trouble, but their suppliers. Fitch Ratings put seven on ratings watch last week because of vulnerability to GM, including American Axle, ArvinMeritor, Hayes-Lemmerz, Johnson Controls, Tenneco, TRW and Visteon.
"Shipments are so low, their cash is depleted," says Jim Gillette, financial service director for consultants CSM.